Cash-Strapped Detroit Faces Exodus of Police, Firefighters

After years of pay cuts and reduction in their ranks, Detroit police officers and firefighters in the next week face a tough decision: Retire now or put their careers in the hands of Detroit emergency manager Kevyn Orr, who has the power to unilaterally cut their pay and benefits.

At least several dozen police officers and firefighters will retire early as they try to lock in benefits before Orr imposes new labor contracts, union officials told Reuters.

A large flight of veteran public safety workers could cause disruption in a city facing some of the nation's highest violent crime rates and a rash of arson fires. This in turn would raise the level of difficulty for Orr as he seeks to address Detroit's myriad urban problems.

Uncertainty over future pay and benefits for the city's 500 mid-level unionized police officers and 917 unionized firefighters is causing some to seek the exit, presidents of the two unions said.

Mark Young, president of the Detroit Police Lieutenants & Sergeants Association (LSA), said 200 of the 500 officers he represents are eligible to retire. He said many are "on the bubble" regarding a decision to retire before the union's contract expires next week.

By retiring now, members of the LSA and the Detroit Firefighters' Association could hope to lock in retirement benefits under their existing contract before Orr could impose cuts to pay and benefits -- a power granted him under Michigan's emergency manager law.

Contracts for the Detroit Firefighters Association, as well as for about 150 unionized emergency medical services workers, both expire June 30. The city's contract with the LSA expires July 6.

Any significant loss of lieutenants and sergeants could immediately damage the Detroit Police Department, said Eric Lambert, head of the criminal justice department at Wayne State University, located in the city.

"You lose the expertise and institutional knowledge if you have too many retire at once," said Lambert.

Orr has had little contact with leaders of public safety unions since his first few days after taking office on March 25, but he has said consistently that public safety is a top priority. He addressed union leaders along with creditors and pension trustees when he forecast large cost cuts and a possible bankruptcy filing in a large-group meeting two weeks ago.

Orr's spokesman, Bill Nowling, said the emergency manager knows a crowd of police officers and firefighters may soon leave. Orr's staff needs to and later this week intends to communicate "at least what our short-term intentions are," Nowling said.

"I know there are guys who are on the retirement bubble and they need all the facts," Nowling said. "We want everybody to make factual decisions and not emotional decisions. We want to provide them with the information to do that."

Orr is holding internal staff meetings and is "hopeful" he can clue the unions in on his plans in the next few days, Nowling added. After the internal sessions, Nowling said Orr can go say to union leaders, "This is what the future looks like, at least for the short-term, so everybody has a clear picture."

One possibility is that Orr may maintain terms of existing contracts for a period of time after expiration, Nowling added.

Police and firefighters are not eligible for Social Security checks because of their city-sponsored retirement funds, to which they contribute with every paycheck. But the city's police and firefighters pension systems are only 78 percent funded, according to estimates by Orr's office. The underfunding is below the 80 percent threshold at which the emergency law allows Orr to replace the board that manages the fund now.

Early retirement likely would not protect retirement benefits, regardless of whether Orr imposes changes or new terms are set under a possible bankruptcy filing. Orr earlier this month said there is a 50-50 chance that Detroit will enter bankruptcy.

"Whether you retire today or you retire two months from now, those two things are going to impact (retirement benefits)," said Nowling.

Dan McNamara, president of the Detroit Firefighters Association, said he is frustrated by the lack of communication from Orr's office.

So is Young, who said, "I have to know what to tell my membership. Right now, we're reduced to collective begging."

Even as Orr decides how to handle pay and benefits, Detroit's new police chief, James Craig, must begin restructuring the police department he will lead beginning July 1.

Craig will "drive the restructuring" of the police department, Nowling said.

Craig is expected to focus on "community policing," which calls for more personal contact between officers and residents. Lambert of Wayne State said that a delayed benefit of new officers may be more openness to new police tactics.

If large numbers of sergeants and lieutenants retire early, Nowling said, Craig will need to promote from within. Around 400 active police officers now working in administrative jobs could shift to patrol positions after some retraining, he added.

The 1,900-member Detroit Police Officers Association has a contract that extends through June 2014. Its members took a 10-percent pay cut last July.

Mark Diaz, president of the police officers union, said the union five years ago represented about 3,000 active officers.

There were more than 700 members in the LSA five years ago, said Young.

Five years ago, there were 1,300 firefighters in the city, and that number has dwindled to 917, said McNamara

Since the beginning of 2012, about 140 firefighters have retired and not been replaced. The department is strapped in trying to cover the city's 139 square miles, he said, and cannot afford even a handful of retirements.

After years of pay cuts and reduction in their ranks, Detroit police officers and firefighters in the next week face a tough decision: Retire now or put their careers in the hands of Detroit emergency manager Kevyn Orr, who has the power to unilaterally cut their pay and benefits.